Posted on: July 23, 2018 by Manchester Specialty
In late 2016, after taking a pause in the Medicare Recovery Audit Contractor (RAC) program, the Centers for Medicare and Medicaid Services (CMS) announced new contract awards for audits to begin in 2017. This included the addition of the RAC for Jurisdiction 5, a national contract to perform audits of durable medical equipment, prosthetic, orthotic and supplies (DMEPOS) claims as well as home health and hospice claims.
Recovery Audit Contractors, which were employed in 2011-2013 after a successful pilot program, were mandated by Congress to review post-payment Medicare claims in order to pinpoint improper payments and extend the longevity of the program Trust Fund. The most recent stats on the results of the RAC program by the CMS are from fiscal year 2015 and indicate the following:
Under the revised 2017 program, RACs receive a contingency fee of 7-17% based on the payments collected by the CMS. There are nine steps to complete an audit, which you can view here in an infographic provided by the CMS.
Payments are deemed improper based on the following:
What’s important to convey to home health care, hospice and DME insureds is the need to establish best practices and standards to remain in compliance in their day-to-day activities. Additionally, providers should be prepared for an audit, which includes:
Also critical is making sure your insureds have the right protection in place in the event of an audit. This includes securing Regulatory Audit Insurance Coverage (RAC) as part of comprehensive insurance program. Manchester Specialty Programs provides RAC coverage as part of our Directors & Officers (D&O) Liability insurance, helping to address alleged violations of RAC and providing the ability to cover defense costs, audit fines, and penalties. Our insurance carrier can also provide compliance assistance and audit preparation and response services. In addition, Administrative Defense Coverage is an alternative coverage available as part of our Professional Liability program.
To find out more about how we can assist you in helping your insureds obtain the coverage they need for RAC protection, contact us at 855.972.9399.